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Problemos Con Tech Investing

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I follow tech news, not like the wannabe investor that I am, but as an avid consumer and social participant.

I will quickly say that a lot of what’s going on is ludicrous at the moment and have two major qualms:

1) the playing field is not leveled or fair and in fact the majority is getting fucked with increased income disparities 

2) the valuations are insane and unsound.

Let’s start with the second of my 2 problems. Apparently the historical average P/E for publicly traded companies is around 15 and that might be reasonable for many of them considering its an average created by the bull and bear, the rich and the poor, etc… Where my problem starts to arise is with companies that don’t come anywhere near that average and instead they rely heavily on future earning projections, which again can be reasonable thinking in some situations, but not when you’ve got more than a handful of companies valued over a billion dollars and all relying on the same growth assumptions. If Twitter and FB both need the same eye balls to be worth $x or $y, then at one point or another it will turn into a zero-sum game. Throw in 5-10 other players across different industries with these overlapping conditional valuations and we’ve all of a sudden found ourselves outside of reality. At one point or another, the air will run out, whether as a response of the slowing Chinese economy that has provided the US with a gush of dollars not seen since the oil boom, or some other cause.

I’m sensitive to injustice. I can’t help it. I grew up with Voltaire and was a bean counting prick for a while. While I am criticizing many new investment opportunities and am not a huge fan of the over aggressive growth seen with companies such as Uber (im sure you’ve heard a story or 2). It’s great that there are many people fighting to make investing easier for non accredited investors and also easier for startups and ideas to raise money (kickstarter, indiegogo, fundrise, etc….). That being said, when you see $500 million dollar financing rounds for companies like Spotify, these rounds make it impossible for the middle class to get involved and are a way for the rich to get richer thanks to the consumers who have massively adopted the technology. I have never and never will wear FUBU, but the statement for us, by us resonates strongly with me. I want to live in a society where what you do to create value is tied into your consumption. You consume what you produce and vice verse. This type of behavior brings us closer to ensuring a positive economic evolution for our society.

The above issues are not super hashed out or backed by any real direct source, but I’ll still stand by them and happily enter further discussion with anyone on the subjects.

 

 

 

 

 

 

 

A Fair Slice of the Pie

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Having lived in France during some of my formative years, I can relate to the culture and society, as if it were almost my own. But, I am not French and have never partook in their political process beyond a couple ‘manif’ against the borderline extremist conservative party, which is the “front national” aka “le FN”. Being abroad makes it a bit more difficult to closely follow the presidential elections; however I was able to watch a few debates between Sarkozy and Hollande.

Charismatically speaking, Sarkozy seemed tired, exhausted in his attempts to lead France and manage his own life. Hollande on the other hand had energy, appeared constructive, critical, but only for the sake of creating more value. At the same time Hollande was also discussing a few crazy policies that people doubted. One of these was his taxation for the “extremely” wealthy and now calling it a symbolic measure.

This is dangerous, extremely dangerous. The taste of capitalism is a difficult one to rinse from one’s pallet. On the positive side, capitalism encourages the belief that hard work matters and that it should be rewarded. While such policy as the 75% tax on income above 1 million euros is intended to reduce the income back and further support the bottom of society, the threat of stifling wealth creation is too great and not only reduces the pie for the extremely wealthy but also for the rest of society as a whole.

What if Hollande focused instead on creating more young entrepreneurs that were able to create income for themselves, jobs for themselves and even pay reasonable taxes to the government for all the social benefits France strives to offer. Too many young French people are leaving France with broken dreams and see the possibilities of what they envision for themselves in another geographic paradise. We live in an internet day and age, anyone can turn the world upside down – that is if they are given the opportunity to do so.

The French President needs to think in more creation driven terms as opposed to the restrictive ones he seems to be pursuing wholeheartedly.

 

A Big Apple for NY, An iPhone 5 for the Rest of Us

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As I near the end of the check out process for the new iPhone 5 and start to realize that I am about to spend a decent amount of money for a new phone. At a moment where even pro-government leaning individuals question government efficiencies and intelligence of operations. I want the iPhone, but do I want to pay the government 8% on top?

The sales tax bill could have been the one for a day meals. Here in one fall swoop of taxes, I have paid the equivalent of what should be about 1/10th of my monthly health insurance premiums. It could also be my annual payment to local government for street lights and “smooth” roads. Either way, I am finding more and more that the money I am paying the government for my well being and the ability to continually participate as a citizen of good standing in the community, is not being allocated efficiently and to the advancement of those goals. I ride my bike and the streets suck, I can’t go the doctor when sick, I don’t go to school, nor do I have any dependents who do.

Then I start to think about all the sales tax that I must pay each year, then imagine multiplying that by the number of people in NYC. In 2011 NYC collected $4.2 billion in taxes. It is beautiful to see a lot of the information we should know such as the state budget, is available, but it is a shame that as a democracy there is such a disconnect between budget planning and the everyday society.

If Apple sells 1 million iPhone 5s in NY in a week, that would be approximately $26 million heading right to the government (keep in mind that is just a small portion of Apple’s sales and an even smaller part of your annual sales tax bill). Bundled with your purchase comes an addon that has diminishing returns for many of us, so think about that when buying your iPhone 5.

Tit4Tat (part 1)

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Just read Mark Cuban‘s Huffington Post contribution from his Blog (part 1) about where we stand today relative to 2008, when Obama was running for his first term. He is not the first to compare our perceptions of the market from 2008 with today’s. To me, this seems to be part of the problem; that comparison metrics like the one used by Mark Cuban should not be more relavant than say: how many fourth graders can correctly name the capital of Spain.

After all, if you ask me why I voted for Obama, it was quite simply because I thought he had international credibility and understanding that McCain lacked or at the very least that international perceptions would have just seen another gun loving American that does not stand for the diversity of the US. The melting pot or salad bowl; however you see it, is what makes the US such a great place.

Part of what happened in 2007-2009 is the result of poor decision making from powerful financiers and the inability for former US economic drivers to remain competitive in current landscapes. Greed also further pushed the economy towards the brink, from the bankers who extended credit against better judgment, to the people who bet too much on the future profits of the next big thing.

Yes, we are all sick of the tit4tat, “you suck, no you suck more” and so on. What we should not be sick of, Democrats like Republicans, are broken commitments, the “you said you were going to do this, but didn’t.” The President, of all people, needs to be accountable to the people. As soon as the President can come forth with their safeties to a society that can forgive imperfection, embrace it, then and only then will have made progress. Instead we have left wingers and right wingers alike calling for extreme measures that are not healthy for the country. If we would impeach the president for the consequences of a blow job, well then it would only seem logical that greater transgressions should be punished more drastically, and this is not healthy either way.

We need to be able to come forth with our mistakes, make commitments to fix them and always honor the commitments we make. If we can successfully do that, then we have a chance of success and saving our nation that was once great from the mediocrity we are currently living.

All that being said, I simply cannot vote for a person that would rather expense $40k+ of tanning services over giving money back to the American people, whom it is EVERYONE’s job to serve –  a president even more so.

 

Hello world!

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“An idea that is developed and put into action is more important than an idea that exists only as an idea.” - Hindu Prince Gautama Siddharta

I have a few ideas, as expected, for what I want to write about, but most importantly, I want to have this outlet to frequently share ideas, thoughts and positions, that could just maybe change the world. Too many people have the foolish and naive optimism that they can change the world, but that is only because of perceptions of what it means to”change the world”. While I would like to say that I am not any less ambitious, I feel that changing the world is only possible through ideas.

“An idea that is not dangerous is unworthy of being called an idea at all.” - Oscar Wilde

There is some truth to the above, ideas are powerful, they can change the world – like we all say and believe. Ideas affect societal power dynamics and thus can face resistance, sometimes the resistance is good and sometimes it stems from dark intentions.

“Good ideas are common – what’s uncommon are people who’ll work hard enough to bring them about”  –  Ashleigh Brilliant

Truth is that part of what I am trying to accomplish is getting enough people to think a certain way, then we can work together towards figuring out how to act the right way.